Tesco faces a battle for Czech shop chain

TESCO is lining up against Europe’s largest retailer Carrefour in the race to buy the Zabka retail chain.

The pair are among four bidders pursing Zabka, which has 2,300 stores in the Czech Republic and Poland.

“There are four bidders left, two strategic (investors) and two financial (investors),” a source close to the transaction said.

“The two strategic investors are Tesco and Carrefour,” a market source added.

Josef Janov, managing partner for Poland at Czech-based Penta Investments which owns Zabka, declined to comment but confirmed the final decision on the sale would be made in January.

Tesco already has a strong presence in Poland and the Czech Republic. Poland is already its second largest European market in terms of sales and profits, and in the Czech Republic’s capital Prague Tesco opened its first standalone F&F clothing store this year.

Offers of around €300m (£256m) are expected to be made for the business.

Janov said last month: “The decision on the initial public offering (IPO) of Zabka or another form of our exit from the investment might be considered at the beginning of 2011.”

French company Carrefour is a hypermarket chain which mainly operates in Europe but also has interests in South America.